Abbey introduces lending policy changes
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Abbey for Intermediaries has made a number of changes to its lending policy and will allow broker advice fees to be included in the mortgage advance in all cases below 75% LTV, provided the fee doesn’t exceed 1% of the total loan.
Abbey says the change is designed to give more choice to borrowers who don’t wish to pay a broker fee upfront, allowing them to instead add it to the mortgage if they wish.
Intermediaries are also no longer required to obtain self-employed accounts as evidence of income where lending is less than 90% LTV. Self-employed income can now be evidenced through either an accountant’s letter or the latest two years’ SA302s.
AFI has also introduced changes to its lending policy for debt consolidation. It has increased the maximum amount allowed for a loan part/s where the purpose is debt consolidation to £35,000, or in cases where the LTV is more than 50%, 35% of the total lending, whichever is lower.
Alan Mathewson, managing director of Abbey for Intermediaries, says: “We constantly review our lending policy and these changes are designed to support both intermediaries and their clients.
“We are pleased to be able to streamline the application process for self-employed borrowers by removing the need to obtain self-employed accounts, and to support borrowers who don’t wish to pay an upfront broker fee by allowing them to add it to their mortgage if they wish.”
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Readers' comments (17)
Anonymous | 4 Mar 2011 1:04 pm
oh how very kind abbey ... as long as the broker does not charge more than 1% ... is this the same abbey that has products charging 995, 1250, 1995 and oh yes 2% booking fees.
this is no help at all, just restrictive to the broker who feeds you.
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Tim | 4 Mar 2011 1:41 pm
Re anonymous complaining about 1% fee limit. I thought all the big fee-charging dinosaur brokers had died in the credit crunch. Has someone cloned one?
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Ben | 4 Mar 2011 1:49 pm
but why limit it to below 75% lending only - do abbey frown upon brokers charging clients who have less than 25% deposit?
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Matthew Williams | 4 Mar 2011 2:10 pm
As a broker who needs to charge fees to survive, I think this is great innovative move by Abbey for helping brokers. I dont think this is "restrictive" at all. 1% of the loan is more than reasonable from a TCF perpective. Also with the removal of the need for 2 years accounts together with the loosened credit scoring, this collectively is the first real evidence I have seen in improving lending criteria and helping brokers for 3 years. Well done Abbey. LBG providers can stick it! If you call BM solutions these days, the welcome message makes you feel like a criminal before you even speak to anybody.
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Matthew Williams | 4 Mar 2011 2:10 pm
As a broker who needs to charge fees to survive, I think this is great innovative move by Abbey for helping brokers. I dont think this is "restrictive" at all. 1% of the loan is more than reasonable from a TCF perpective. Also with the removal of the need for 2 years accounts together with the loosened credit scoring, this collectively is the first real evidence I have seen in improving lending criteria and helping brokers for 3 years. Well done Abbey. LBG providers can stick it! If you call BM solutions these days, the welcome message makes you feel like a criminal before you even speak to anybody.
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john | 4 Mar 2011 2:17 pm
so mr anon - you get paid 1% broker fee plus a proc fee. typical greedy broker always wanting more.
this is a positive move allows payment for the broke and allows for those on a tight budget who need as much money as possible for deposit - legals - stamp etc.
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Anonymous | 4 Mar 2011 2:53 pm
To Anonymous at 1.04pm, 2 points. Do really think charging more than 1% on a resi mortgage is fair? That would be in ecess of £1K on an average loan. Slightly hard to justify
Secondly,why shouldn't Abbey charge a selection of fees and rates? It is called choice. If you are of the view that these fees can't be justified it shows just how out of touch you are with funding and liquidity issues at present
With comments such as these it is hardly surprising some lenders are concentrating attracting direct business...
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anon | 4 Mar 2011 3:15 pm
this is interesting. looks like proc fees are on their way out..........all you fee free brokers beware - look like your model is under serious threat.
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Anonymous | 4 Mar 2011 4:17 pm
Abbey would allow you to charge more than 1% but those monies would need to be paid upfront by the customer in the same way if they LTV is above 75% LTV.
These rules relate to broker fees which are being added to the mortgage advance and not a restriction to the total fee.
Their website explains the rules.
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Anonymous | 4 Mar 2011 6:53 pm
Tim, why do you need to be a dinosaur to charge a fee? if you offer a professional servic you expect to get paid! simple as.
john, 1% is fine on a large loan but you do equal work on a small 25k remo so this is 250 quid. not greedy just valuing the service and skills brought to the table.
anon 2.53 the 1% fee they will allow you to add is quite rich when they charge flat fees of 995-1495. i understand all the liquidity issues but why should a lender dictate what you charge for your services. it is the buyers choice.
what if you charge all your clients a flat fee irrespective of loan size? the work you do is the same more or less on 25k as it is on 500k.
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